Procter and Gamble:Fighting Malnutrition

Business Innovation to Combat Malnutrition Case Study Series

Case A

This paper was prepared by Melissa Tritter (Harvard Business School), Michael

Jarvis (World Bank Institute), Bérangère Magarinos

(Global Alliance for Improved Nutrition), and

Djordjija Petkoski (World Bank Institute). It is based on

interviews with executives and scientists at Procter and

Gamble. We would like to express our gratitude to the P&G team for sharing

information with us, participating in numerous meetings, and providing

comments on the draft paper. Our particular thanks go to

Ethel Cormier.

For participation in interviews and follow-up guidancewe would like to thank

Haile Mehansho, Kenneth Smith, Don Compton,

and Mike Jensen of Procter and Gamble.

Copyright © 2007, the World Bank Institute and the Global Alliance for Improved NutritionThe views expressed in this paper are those of the authors only.

Haile Mehansho, a nutrition scientist at Procter

& Gamble (P&G), was working on iron forti-

fication technologies when he learned that the

1990 United Nations World Summit for Chil-

dren would have a special focus on micronutri-

ent malnutrition. Intrigued, he followed the

summit closely and requested a copy of its final

report. Within the summit’s Plan of Action,

Mehansho read the following:

Hunger and malnutrition in their different

forms contribute to about half of the deaths

of young children. More than 20 million chil-

dren suffer from severe malnutrition, 150 mil-

lion are underweight and 350 million women

suffer from nutritional anemia.

Specifically, summit participants agreed on

three challenging micronutrient goals: by the

year 2000 they would eliminate iodine deficien-

cy, eliminate vitamin A deficiency, and reduce

iron deficiencies and nutritional anemia by one

third.

This struck Mehansho as something P&G could

help with. The iron-fortification technology

he was working on could be used for other nu-

trients as well, and where there was an unmet

need there could also be a business opportunity.

The devastating effects of micronutrient deficiency

Micronutrient malnutrition was also known

as “hidden hunger” because its effects were

not readily apparent, but were nevertheless

devastating. Insufficient iron, vitamin A, and

iodine – the three key nutrient deficiencies

highlighted by the UN – had particularly

severe and persistent consequences. They led to

increased morbidity and mortality rates, risks

to both mother and baby during pregnancy,

fatigue, decreased strength, and impaired cog-

nitive development and functioning. (For more

detail, see Exhibit 1).

There were several proven tactics for fight-

ing micronutrient malnutrition, including

increased diet variety, staple-food fortification,

and medical or dietary supplements (Exhibit 2).

By 1990, these tactics had practically eradicated

the problem of micronutrient deficiency in the

developed world, but deficiencies remained

prevalent in developing nations (Exhibit 3),

despite the relatively low cost of solutions

(Exhibit 4).

For those affected, physical and mental symp-

toms not only lowered their quality of life, but

also lowered their productivity – perpetuating a

cycle of poverty and malnutrition.

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P&G: An early innovator in nutritional products

Procter and Gamble, founded in 1837, was a con-

sumer products company with a long history in

the food and beverage business and of seeking to

develop both nutritionally beneficial and profitable

products. It’s first “nutritional” product was Crisco,

introduced in 1911 as the first all-vegetable shorten-

ing. Crisco was marketed it as a healthier alternative

to cooking with animal fats.

P&G opened its first dedicated upstream research

facility, Miami Valley Laboratories, in 1952. Three

years later the company introduced Crest, the first

fluoride-fortified toothpaste clinically shown to

reduce tooth decay.

In the mid-1980s, Procter & Gamble developed

the first calcium-fortified orange juice, selling it

under the brand name Citrus Hill. The technology

involved was considered a breakthrough in nutrient

fortification, but the product was not a commercial

success. Most people, at that time, did not consider

calcium to be important for adult health.

P&G conducted clinical studies that showed other-

wise, but the public was slow to take up the message.

The company discontinued the Citrus Hill brand,

but a few years later it found commercial success in

fortifying Sunny Delight and Hawaiian Punch with

calcium, and also licensed the technology outside

the company, to Tropicana.

Choco Milk and the “Lock/Unlock” fortification system

P&G acquired Richardson-Vicks in 1986, gaining

a diverse portfolio of health and beauty prod-

ucts – including Choco Milk, a “fortified” chocolate-

flavored powder sold in Mexico as a milk modifier.

The product sold mainly based on taste, but was

widely associated with childhood nutrition. It was

particularly popular in low-income market seg-

ments.

With the acquisition of this particular product,

P&G researchers looked for ways they could add

value based on the company’s core strengths. They

consulted thought leaders at Mexico’s National

Institute of Nutrition, who said that iron was the

number one fortification need. Haile Mehansho

studied the iron-fortification technology that had

been used by Richardson-Vicks, and found the iron

had extremely poor bio-availability – and therefore

no real nutritional value.

Mehansho took the lead on finding a better way to

deliver nutrition in this popular product. With a

small team, he studied the way iron was delivered

in nature – particularly in meat, which had highly

bio-available stores of iron. They found that the

iron was “locked” and unavailable until ingested;

then chewing, stomach acids, and other digestive

processes would “unlock” the iron molecules so that

they become bio-available.

To mimic this naturally-occurring process, Mehan-

sho developed a way to bind the iron into complex

molecules that would be broken down by the

digestive system. While bound in this way, the iron

lacked the metallic aftertaste and unappealing color

that bio-available iron tended to produce. After

ingestion, the complex molecules broke down and

the iron became highly bio-available, delivering the

desired nutritional benefit.

Using the new technology, in 1989 P&G introduced

a new version of Choco Milk, now fortified with

iron, vitamin C, and eight other micronutrients.

UNICEF provided a seal of approval that appeared

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on the packaging. In marketing the product, P&G

used the consumer benefit statement “more en-

ergy” – a simplified way of conveying that iron defi-

ciency led to anemia, which caused chronic fatigue

and decreased strength.

Choco Milk’s potential for global expansion

As sales of Choco Milk skyrocketed in Mexico, P&G

considered whether the product had potential

for other markets worldwide. The company was

organized along geographic lines, so expansion

depended on the overseas managers of a particular

country or region. The Food and Beverage Division

held discussions with the Philippines management,

which Ken Smith, Director of Snacks and Beverages

at the Nutrition Science Center, recalled as follows:

Choco Milk was considered for the Philippines, but

didn’t make the cut. It was the late-80s and there

was political instability and a lack of commercial

interest, so we never commercialized. But [Mehan-

sho’s] conversations with thought leaders included

feedback that not all the world consumes chocolate

as the preferred beverage. They wanted to know:

Could you do the same thing in a drink that’s not

chocolate?

The United Nations Summit for Children

Following the 1990 UN Summit for Children, Me-

hansho became convinced that his team could and

should help by expanding their fortification tech-

nology to include not only iron but also vitamin A

and iodine. He sold the idea internally, focusing on

the huge underserved market of people suffering

from vitamin and mineral deficiencies, and the fact

that governments and NGOs were already directing

attention toward it.

Over the next two years, Mehansho and his team

fortified Choco Milk with additional micronutri-

ents (including vitamin A) and also modified Star

Margarine (a popular shelf-stable brand sold in the

Philippines) to include vitamin A fortification (see

Exhibit 5).

Developing a fortified fruit-flavored beverage

In 1993, the Food and Beverage R&D group invited

Dr. Michael Latham, a professor of International

Nutrition at Cornell University, to give a seminar at

the Miami Valley Innovation Center in Cincinnati.

Latham, a globally-recognized expert in micronutri-

ent malnutrition, was passionate about eradicat-

ing worldwide deficiencies of iron, vitamin A, and

iodine. After the seminar, Mehansho and his team

had a discussion with Latham in which they told

him about Choco Milk and Star Margarine.

Latham was excited. He shared the same objec-

tive as P&G – a commercial vehicle that would

appeal to consumers, convince them of its value,

and encourage efficient production and distribu-

tion by harnessing market forces. He suggested

that Mehansho’s team connect with UNICEF, with

whom Latham was already doing some consulting

work. Mehansho felt that partnering with outside

organizations would be a win-win situation, with

P&G able to benefit from external expertise and

verification of clinical trials, and to potentially se-

cure marketing support from credible organizations.

Teams from P&G, Cornell University and UNICEF

met at the UNICEF office in New York. An agree-

ment was reached by the three institutions to deliver

multiple micronutrients in a simple, affordable

product that was also clinically proven. The project

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was called “NB3” – a product code based on the idea

of a Nutritious Beverage containing 3 micronutri-

ents (iron, vitamin A, and iodine).

At first, NB3 research was funded by P&G’s Mexican

division, under the Choco Milk umbrella. Managers

had seen how successful the improved Choco Milk

was, and knew that fruit-flavored beverages were

even more popular in Mexico than milk modifi-

ers – so this seemed a natural direction for growth.

In 1994, however, P&G reorganized into “global

brands” – a major strategic change intended to

simplify decision-making and leverage key brands

on a worldwide scale. As a result, Choco Milk was

divested in 1996, leaving NB3 briefly without an

organizational home. At the urging of the R&D

team, senior management decided to fund further

development of NB3 from a special account.

Technology development

Back at the lab, Mehansho was enthusiastic about

the opportunity to build public-private partner-

ships to eradicate micronutrient malnutrition, but

knew that developing the new product wouldn’t be

easy. The “lock/unlock” idea was the same as it had

been for Choco Milk, but the chemistry of a fruit-

flavored drink was very different. Higher acidity

levels meant that several technical challenges had to

be solved all over again, including:

• Bioavailability – As the team had shown with

Choco Milk, nutrients had to be delivered in a

form that the human body could absorb.

• Taste/Smell/Color – Many fortificants tended

to react with a food or beverages to create an

unpleasant taste, strong odor, or discoloration.

When this happened, consumer acceptance

dropped dramatically.

• Stability – Certain nutrients were chemically

reactive when exposed to heat, light, and

changes in acidity – requiring special formula-

tion and/or packaging.

By 1996, Mehansho’s team had succeeded in devel-

oping a fruit-flavored powdered beverage fortified

with iron, vitamin A, iodine, zinc, vitamin C, and

B-vitamins. The nutrient mix was named “Growth-

Plus” and the finished drink mix “Nutri Delight.”

Clinical trials and taste testing

Dr. Latham was able to perform double-blind, pla-

cebo-controlled clinical trials in Tanzania, through

Cornell’s relationship with the Tanzania Nutrition

Center (TNC). UNICEF and the Micronutrient

Initiative1 funded the trials while P&G provided

the test samples. Over six months, children (aged

6–12) who drank Nutri Delight grew 26% more and

gained 80% more weight than the placebo group

(see Exhibit 6).

Another study was carried out in Bangladesh, where

BRAC2 performed the trials. Adolescent girls aged

10–15 were given NutriStar for a year, and showed

significant improvements in micronutrient status

(see Exhibit 7), height, weight, and school tests.

In taste trials, a five-day home-use test in the Philip-

pines showed a powdered fruit-flavored drink forti-

fied with the GrowthPlus technology to have strong

consumer acceptance for taste and appearance.

1. The Micronutrient Initiative was launched as a result of the 1990 UN Summit for Children, with the mission of eliminating micro-nutrient malnutrition; sponsors included UNICEF, the World Bank, the International Development Research Centre, the Canadian International Development Agency, and the US Agency for International Development (USAID).

2. The Bangladesh Rural Advancement Committee, commonly known as BRAC, was founded in 1972 as a donor-funded relief agency.

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“Nutri Delight” is introduced in the Philippines

Since the Philippines management team had

expressed an earlier interest in a fruit-flavored bev-

erage, and because the Philippines had in the past

been fertile ground for new products, P&G decided

to create a “learning market” there. In 1999 Nutri

Delight was launched as a childhood nutrition

product for families of all income levels, available

in grocery stores and in the sari-sari booths that

poor rural customers patronized. It was distributed

through a P&G sales force, and marketed with

the consumer benefit statement “Taller, Stronger,

Smarter.”

P&G collaborated with several external partners,

including UNICEF, The Nutrition Center of the

Philippines (NCP) and the Philippines Department

of Health. The NCP requested additional clinical

trials using Filipino children as subjects; P&G did

this and the positive results supported those of

earlier trials. UNICEF issued a statement that Nutri

Delight was an excellent source of micronutrients,

and this appeared on the product packaging. P&G

also worked with Dr. Florentino Solon and the De-

partment of Health to create a nutrition curriculum

to be taught in local elementary schools, funded

through donations and government aid.

Early production plans had involved importing

Nutri Delight to the Philippines, despite the high

cost of doing so. Prior to the launch, however, P&G

decided to not only learn about consumer accep-

tance, but also to test the product for financial vi-

ability. Therefore the company hired a local contract

manager to build a plant from scratch to the precise

specifications needed. Local production helped

reduce costs dramatically, though in the long run

P&G did not want to be overly involved in produc-

tion and distribution.

Even with positive clinical results, strong multi-sec-

tor partnerships, and local production, the Filipino

drinks market was not an easy one to enter. As Ken

Smith described it:

There were competitors in the Filipino market.

The number one powdered beverage was the

locally-produced “8 o’clock” brand; it was forti-

fied with Vitamin C, Vitamin A and a host of B

vitamins, but it didn’t have iron. The number two

brand was Tang, which was less fortified. We were

entering the market as number three – with some

fairly strong claims. And we felt we could support

them, but of course there would be a competitive

reaction.

P&G was challenged in court over its claim that

Nutri Delight would make kids “Taller, Stronger,

Smarter.” It won the lawsuit, but still had difficulty

convincing the average consumer that Nutri Delight

offered special benefits over other orange-flavored

drinks. Therefore, the product struggled to gain

market share against the competition.

Other problems in the test market included distri-

bution challenges and pricing structures that made

it difficult to reach the poorest communities. Also,

while educational messaging was working well,

brand awareness was still low. As a result of these

difficulties, in 2000 P&G withdrew Nutri Delight

from the Philippines market, much to the disap-

pointment of Dr. Solon and NCP.

“NutriStar” is introduced in Venezuela

Although the product had been pulled, the R&D

team still had a passionate group of scientists who

believed Nutri Delight could bring important ben-

efits to underserved consumers – and was a business

opportunity for P&G. They wanted to see the prod-

�

uct on the market again, and lobbied for continued

company support.

Mehansho asked Jorge Montoya, head of the Food

& Beverage division, to help.

While Montoya was now based in his native Venezu-

ela, he had previously been in Mexico as president

of P&G operations there – coincidentally, at the

time that the new Choco Milk formula had been in-

troduced. Montoya therefore had a special apprecia-

tion for Mehansho’s work, and agreed to introduce

the fortified fruit drink to the Venezuelan market.

In September of 2001, the product – now branded

as “NutriStar” and available in four flavors – was

launched in Venezuela, with manufacturing in

Mexico.

To promote consumer awareness, P&G partnered

with UNICEF, the Venezuelan Department of

Health, and the Venezuelan Pediatric Society – with

the Pediatric Society granting NutriStar a “seal of

approval.” There were also brand-oriented market-

ing efforts, such as an endorsement by the only

Venezuelan basketball player in the NBA and a deal

with McDonald’s to have orange-flavored NutriStar

available as a fountain beverage. As in the Philip-

pines, a P&G sales force handled distribution from a

centralized warehouse.

Just three months after entry, NutriStar had 90%

brand recognition in the Venezuelan market. Within

a year, it had taken over nearly 15% of the mar-

ket – with twice as many households now buying

fruit-flavored powdered drink mixes. NutriStar was

sold mostly in supermarkets and grocery stores,

with P&G working to reach smaller rural outlets.

Manufacturing

Despite the high degree of consumer acceptance,

NutriStar was still a challenging business proposi-

tion. Production costs in Mexico were high com-

pared to the retail prices the Venezuelan market

could support, and it was expensive to ship the

finished product.

Local manufacturing was not an immediate option

because production was so complex. The Growth-

Plus formula had to be combined with over a dozen

“premix” ingredients and then added to a beverage

matrix of 15 other carefully-measured ingredients.

It was essential to have even mixing, a precise pH-

level, and special light-blocking packaging. Low-

income countries didn’t have such sophisticated

manufacturing methods in place.

P&G had built a special plant in the Philippines, but

to expand the product rapidly it needed manufac-

turing methods that would be easier to start-up

locally. The company developed a simplified process

in which one skilled third-party supplier would

make a nutrient premix, another would combine

the premix with a beverage matrix of flavors and

colors, and this “concentrate” would be sent to the

local manufacturer in pre-measured packaging. At

the local level, the only additions would be sweeten-

ers and citric acid – both readily-available commod-

ity ingredients.

Crisis in Venezuela

In 2002, just as P&G was exploring options for local

manufacturing, crisis hit Venezuela. A failed coup,

violent protests, and a general strike all contributed

to political instability, economic standstill, and a

plummeting currency rate. Around the same time,

P&G decided to divest the company’s few remaining

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non-coffee beverages and all related technologies,

mirroring an industry-wide consolidation toward

narrower product lines, outsourcing, and globalized

operations (see Exhibits 8, 9 and 10).

With the Venezuelan market collapsing, and all P&G

beverages essentially on the auction block, Nutristar

seemed destined to either fail or to become some-

one else’s success. Nutristar had so recently seemed

to have a real chance of making a significant impact

on worldwide nutrition, but now everything was on

the line.

What should the team do – both for P&G, and for

malnourished populations?

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Exhibit 1. Consequences of key micronutrient deficiencies

Vitamin A Iodine Iron

Physical • Reduced growth in children• Increased vulnerability to

disease• Visual impairment and

blindness• Night blindness

• Reduced strength• Increased vulnerability to

disease• Goiter (visibly enlarged

thyroid)

• Reduced growth in children• Reduced strength• Increased vulnerability to

disease

Mental • Decreased brain development in children

• Reduced cognitive function• Lower IQ with mild

deficiency• Endemic cretinism

• Decreased brain development in children

• Reduced cognitive function (recall, concentration, etc.)

Reproductive • Increased risk of maternal mortality

• Reproductive failure • Fetal damage• Spontaneous abortion • Stillbirth• Low birth weights

• Increased risk of maternal mortality

Mortality • Increased mortality rates;• Decreased infant survival

rates

• Premature death

Source: Compiled by the authors.

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Exhibit 2. Tactics for fighting micronutrient deficiency

A variety of tactics had been used to fight micro-

nutrient malnourishment in the developed and

developing worlds. These fell, broadly, under the

categories of: increased diet variety, food fortifica-

tion, medical supplements, and dietary supple-

ments. Each had advantages and disadvantages, as

follows:

1) Diet variety, or eating many different foods

with different nutritional benefits, was gener-

ally considered the ideal solution for micro-

nutrient malnutrition. Often, nutritionists

encouraged greater variety through educa-

tion – for example, in the U.S. the “four food

groups” and later the “food pyramid” encour-

aged a balance of various foods. However, in

the developing world this tactic was difficult

and expensive to implement, since many poor

areas had a limited array of local foods and

little buying power for imports. Encouraging

crop variety could help, but results were slow

to materialize.

2) Medical supplements presented several

problems. As Mehansho noted: “Using a

pill to address micronutrient deficiency

presents a compliance problem, even in the

U.S. – and even if you give it away for free.

People complain of side effects, like cramp-

ing, and they don’t like to take it.” Also, since

young children could not safely swallow pills,

alternatives such as liquid supplements were

necessary, but had a much shorter shelf life

and were expensive to ship. Another issue

was that formulations designed to appeal to

children could increase the risk of overdose.

3) Fortification of staple foods had been highly

successful in Western Europe and North

America, where iodized salt, iron-enriched

flour, and vitamin A and D fortified milk

were the norm. In developing economies,

however, store-bought staples were not as

common, and so this tactic might not reach

the target populations. Another problem was

that manufacturing methods were often crude

and highly varied, so fortification tended to

require centralized production – imposing

negative economic impacts on the local sup-

ply chain. Biofortification, a relatively new

method, held the promise of developing crops

with greater concentrations of nutrients, but

involved the wider controversies of geneti-

cally-modified crops.

4) Dietary supplements were foods dense in nu-

trients that could be bought and consumed in

addition to a normal local diet. At first glance,

this might seem a high-cost way to provide

nutrients – fortifying staples or providing

nutrients in pill form was cheaper – but there

were important advantages. This method

accepted that a diet rich in variety of natu-

ral foods was often unrealistic, avoided the

compliance problems of medical supplements

by providing something that people enjoyed

consuming, and left local supply chains and

home production of staple foods intact. The

key was to find ways of making a product that

was appealing, available, and affordable.

10

Exhibit 3. Cost-effectiveness of micronutrient solutions

Micronutrient provision was widely recognized as

one of the most cost-effective ways to improve lives

worldwide. The expenses were relatively mod-

est, and were more than justified by the resulting

increases in productivity.

Estimated yearly per-person costs of providing key micronutrients (in 1994 US$)

Fortificaton of centrally processed foodsTablet form, administered by

medical professionals

Iodine US$0.0� to US$0.�0 US$1.00 to US$�.00

Iron US$0.0� to US$1.0� US$1.�� to US$�.��

Vitamin A(retinol palmitate) US$0.0� to US$0.�0 US$0.�� to US$1.00

(combined A and E)

Source: Compiled by casewriters based on statistics included in Popkin, Barry M.; “Key Economic Issues”; Food and Nutrition Bulletin; vol. 1�, no. �; © The United Nations University, 1���; accessed online 0�/0�/0� at www.unu.edu/unupress/food/V1��e/ch0�.htm

Exhibit 4. Areas of the world having micronutrient deficiency risk

Source: USAID (as cited in Fischer T et al. (�00�), New Directions for a Diverse Planet: Proceedings of the 4th International Crop Science Congress, Brisbane, Australia, �� Sep–1 Oct �00�.

11

Exhibit 5. The Star Margarine story

Star Margarine had been popular in the Philip-

pines since 1931, particularly among lower-income

households because it did not require refrigeration.

In 1988, a vast majority (94%) of the Filipino popu-

lation consumed Star Margarine, and 89% of those

were considered low-income.

In 1990 the dean of the Johns Hopkins School of

Hygiene and Public Health visited P&G managers in

Manila, and advocated for vitamin A fortification of

Star Margarine. After P&G accepted this challenge,

Mehansho’s team collaborated with the Nutrition

Center of the Philippines (which led the field trials),

the Philippine Department of Health (which for-

mally endorsed the product), and research teams at

several universities (who developed technology for

bio-available and heat-stable fortification).

Marketing began with radio and television cam-

paigns, co-sponsored by the Philippines government

and by NGOs such as Hellen Keller International

and UNICEF, to educate the population about the

need for sufficient vitamin A. Following successful

field trials, P&G began advertising the product itself,

and the newly-fortified Star Margarine was intro-

duced in 1993. At the suggestion of the Nutrition

Center of the Philippines, P&G added single-serving

packets to the product line, making vitamin A avail-

able to those who did not have enough cash to buy

larger quantities.

Within three years, sales had increased 25%, from 4

to 5 million kilograms annually, with fortification

costing less than US$0.07 per kilogram. This made

the project an overwhelming commercial success.

Despite this success in the Philippines, Star Marga-

rine did not show potential for worldwide expan-

sion. As P&G moved toward a “global brands” focus,

and also began questioning the fats and shortenings

business, it became increasingly apparent that Star

Margarine was not a strategic fit. P&G divested Star

Margarine in 1995 and Crisco a few years later. As of

2006, Star Margarine was still sold in the Philippines

but was no longer a P&G brand.

———————

Sources: Florentino S. Solon, “History of fortifica-

tion of margarine with vitamin A in the Philip-

pines”; published by the United Nations University,

accessed 8 September 2006 at www.unu.edu/Unu

press/food/V192e/ch10.htm; divestment informa-

tion from P&G interviews.

1�

Exhibit 6. Tanzania clinical study

Exhibit 7. Bangladesh study

Source: Adapted by casewriters from P&G materials (“NutriStar® Business Overview”)

Source: P&G marketing materials (“NutriStar® Business Overview”)

4.0

3.4

2.7

0.0

1.0

2.0

3.0

2.01.8

1.0

0.0

0.5

1.0

1.5

NutriStar

Height Gain (cm) Weight Gain (kg)

Effect of NutriStar on height and weight of children aged 6–12over a one-year time period

Placebo NutriStar Placebo

14 14

0

4

8

12

16

2

6

10

14

Baseline

2 2

14

6 months

15

12 months

Effect of NutriStar on iron deficiency anemia (%)

Fortified Not fortified

1�

Exhibit 8. Declining diversification of product lines among leading U.S. manufacturers

Note: “Diversification” calculated using the entropy measure of unrelated diversifica-tion DU=Piln(1/Pi), where Pi is the proportion of a firm’s sales made in �-digit industry segment i, as reported on annual 10Ks. Sample is �00 largest manufacturers (by sales) for each year.

Source: Gerald Davis et al.; “The Responsibility Paradox: Multinational Firms and Global Corporate Social Responsibility”; Ross School of Business Working Paper Se-ries; Working Paper No. 10�1; April �00�; downloaded from http://ssrn.com/ab stract=���11�

0

0.1

0.3

0.5

0.7

0.2

0.4

0.6

1980 1985 1990 1995 2000 2005

Exhibit 9. Declining employment concentration

14.0

17.0

20.0

Perc

ent

22.0

15.0

19.0

16.0

18.0

21.0

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Source: White (�001), Table 1�; as cited in Gerald Davis et al.; “The Responsibil-ity Paradox: Multinational Firms and Global Corporate Social Responsibility”; Ross School of Business Working Paper Series; Working Paper No. 10�1; April �00�; downloaded from http://ssrn.com/abstract=���11�.

1�

Exhibit 10. Increasing international sales of large U.S. firms

Exhibit 11. The PUR water purification strategy

Another Worldwide Crisis; Another P&G Technology

Starting in 1995, scientists at P&G’s Nutrition Sci-

ence Center made a focused effort to find new ways

to purify drinking water. Working with the U.S.

Centers for Disease Control and Prevention (CDC),

they succeeded in developing the PUR water purifi-

cation technology.

Sold in individual sachets, PUR is a powder that,

when added to unclean water, causes contaminants

to adhere to it and form clumps which fall to the

bottom of the vessel. This “floc” is then manually

removed by pouring the water through a simple

filtering material, such as cloth.

The product was not a short-term profit vehicle,

but the company’s corporate social responsibility

team took it over and operated it as a low-margin

business which, in collaboration with governments

and aid agencies, offered the possibility of immense

social returns in both emergency-aid situations and

for daily life.

0

5

20

30

10

15

25

1985 1989 1993 1997 20011987 1991 1995 1999 2003

Note: Mean non-US sales calculated from firm-level geographic segment data for the 1��� Fortune �00 largest manufacturers, as reported on annual 10Ks

Source: Gerald Davis et al.; “The Responsibility Paradox: Multinational Firms and Global Corporate Social Responsibility”; Ross School of Business Working Paper Se-ries; Working Paper No. 10�1; April �00�; downloaded from http://ssrn.com/abstract=���11�

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